Tag Archives: spread

Best Forex Brokers – What You Should Look For In Forex Brokers?

This article will show you an easy way to choose the best broker that will work well with the Forex Market

a. The broker should be registered with the Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM). Because of this you have legal protection against any abusive trading practices and frauds that could arise.

b. Is the broker governed? This signifies that whenever you register with use their services you will have protection and insurance against any kind of internal fraud. Likewise, your funds will stay apart from the broker’s operating funds.

c. Is the broker one of the market makers whilst some are ECN brokers, offering a trading station for traders.

d. Look for brokers who offer low spreads. The spread is the difference between the bid and ask prices of the currencies you trade. Brokers do not make a commission on your trade, instead these people take the spread as reimbursement. Pay attention to variable spreads, they can be different for large accounts and mini-accounts.

e. Slippage. Can they provide you with specifics of what exactly slippage they would expect to occur during normal and fast moving markets?

f. Margin requirements. Which is the percentage of the investment in your trades they would expect you to pay to open up a trade. You also want to be informed on their margin calls, along with the time you have to respond to such call.

g. The Rollover Policy. Do they have any minimum margin requirements that they use to earn interest on any overnight positions? Plus, do they have any other requirements or conditions with regards to you generating interest on any rollovers.

Make sure you examine thoroughly the trading directions to understand how the broker will help you handle your trades. If you happen to neglect some relevant particulars, you may lose money on your initial trade. So take the time to read the details and ask the brokers or their support staff any questions possibly you have before you open your first trade.

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